Yes, sometimes we do need to address behavior from outside of school that bleeds over into school activities. For example, a few years ago students started fighting each other, filming the fights, and posting the videos to youtube. When it became something that unwilling students were being bullied into, and 50-100 students were leaving school to cheer on, the school appropriately got involved. "Off school grounds" does not always mean it's not school business.
I certainly don't mean that schools should look for stuff to investigate. I also don't see enough particulars from this article to make a clear judgement about this case. But when it is appropriate for the school to get involved, these situations can be handled without anyone handing over their password.